A：So Young's key highlights in the second quarter of 2026 include robust performance, with revenue reaching RMB 330 million, approximately 130% over the year, and beating the upper end of guidance by about 5%. Net losses attributable to the company decreased by 37% year over year to RMB 22.7 million. The treatment business also experienced a robust performance with revenue of approximately RMB 510 million, and operational efficiency improved.

A：So Young's treatment business expanded effectively, guided by the dual pillars of scale and efficiency. Medical capabilities and AI adoption contributed to improved operational ability and robust performance in Q2. The business saw a significant increase in revenue and better operating efficiency, as evidenced by a 33% year-over-year increase in revenue to approximately RMB 510 million and a 37% decrease in net losses attributable to the company.

A：So Young's clinic expansion indicates strong growth, with the number of clinics reaching 1,850 with 602 centers in total by the end of Q2. This expansion included enhanced accessibility and consumer awareness, which drove continued growth in treatment volume and user base. Specifically, VA visits exceeded 165,000, up 145% year over year, and procedures performed were above 36,200, up 134% year over year. The active user base reached over 250,000, and the number of level 3 and core numbers exceeded 38,000, reflecting high user regard for the quality of treatments.

A：The performance of So Young's technology in Q2 indicates a marked improvement in operational efficiency. The number of preferred stock interests rose to 47, with 51 generating positive operating cash flow. The gross margin of the expected treatment improved by about 3.8 percentage points year over year to 28.1%. These outcomes validate the management's approach and demonstrate a healthy growth relying on an improved supply chain and product lineup.

A：So Young's collaboration with other medical device and treatment partners is contributing to the company's strategy by moving towards project co-creation, case development, and long-term value alignment. This partnership model is designed to cover consumer insight definition, education development, physician training, uniform protocols, post-launch evaluation, and continuous intervention, accelerating the translation of advanced technology from R&D to real-world use.

A：The significance of the new versions of Miracle Plra and the expansion of the product portfolio is to improve injection outcomes and meet diverse customer needs. By enhancing the microparticle diameter, the product is positioned to improve quality in the collagen category. This product expansion aims to provide a wider range of solutions to consumers, further solidifying So Young's market position and commitment to meeting diverse aesthetic treatment needs.

A：So Young has expanded its physician team to meet growing market demand, with the number of full-time positions increasing to around 280 as of June 30, 2026. The company has also enhanced physician capabilities and treatment workflows using medical guidelines, treatment center standards, radio audits, and other training and quality control systems. In Q2, specialized training workshops were conducted, and 12 training sessions were completed to ensure that the new divisions were well-prepared to deliver consistent clinical care.

A：AI technology is being utilized by So Young to power decision-making, ensuring consistent delivery quality and leveraging scale to improve medical care for more consumers. The company is focusing on building a real-world database and clinical AI infrastructure tailored for the industry. This includes initiatives such as launching a virtual medical dispense platform and dual screens displaying treatment SOPs in real time to enhance transparency and uniformity in medical services.

A：So Young's strategic priorities for the remainder of the year include building a premium medical service framework and consumer trust, enhancing operating efficiency, and increasing margins to unlock greater economies of scale across the clinic chain. The company also plans to further diversify its supply chain, and utilize its AI and digital capabilities to deliver high-quality services and maintain a competitive project portfolio.

A：The company's strategy for driving sustainable growth includes aligning products with consumer consumption patterns, aesthetic preferences, and online coaching habits. They have raised capacity utilization benchmarks, optimized operational efficiency through customer flow management, dynamic staffing, and intelligent inventory control. The company aims to maintain high growth through disciplined and market-responsive expansion, adjusting the opening cadence based on regional utilization levels to balance scale and profitability. They have also made systematic investments in compliance, user experience, and organizational infrastructure to sustain high growth over the long term.

A：The company delivered a 77% year-over-year improvement in profitability for the second quarter of 2026.

A：The 10 consecutive quarters of triple digits revenue growth signifies the company's commitment to growth quality and sustainability. It validates their market estimates and execution discipline, and the continuous refinement of central level unit economics, along with a market-responsive expansion strategy, ensures that growth remains high quality and sustainable.

A：The loyalty program and Cosme treatment protocols caused a 3 to 5 percentage point deferral between service delivery and revenue recognition, leading to reported near-term revenue that builds a deferred revenue base which underpins long-term growth.

A：Cost of revenue was 282.4 million, up 53% year over year, primarily due to the expansion of branded aesthetic centers. Total operating expenses were 266.5 million, up 10.4% year over year. Sales and marketing expenses were 153.5 million, while research and development (R&D) expenses were 74.4 million, down 21.7% over the prior year. This reflects the company's continued investment in AI integration and operational efficiency.

A：The company expects revenues from aesthetic treatment services to be between 352 million and 362 million, representing year-over-year growth of 91.7% to 97.2% for 2026.

A：The client is applying AI to product authentication, back offices, course control, state foundations and governance, Q code authentication, verifying medicine and device traceability, immediately resolving contract related concerns, building end-to-end trust and transparency, and breaking down top position experiences into a database.

A：The growth margin increased by 3.8 percentage points year over year and by one percentage point quarter to quarter. Key drivers for the improvement include a focus on scale and efficiency, production of new products, labor productivity increases, and better capacity utilization.

A：The company plans to improve gross margins through continued scale and efficiency improvements, further increases in product and labor productivity, enhanced capacity utilization, and restructuring service workflows to reduce customer wait times. They also aim to optimize the supply chain, improve collaboration with upstream partners, and increase the share of mature operating frameworks in their footprint.

A：The extensive network gives the company more banking power, allows for better procurement cost advantages from larger volumes, and enables collaboration with upstream partners for competitive deals and priority partner rights in high-demand categories.

A：AI is used to allocate resources and manage equipment, warehousing, and customer operations more precisely, which drives better presenter economics and is expected to result in ongoing growth margin improvement.

A：The core driver for loss reduction is focusing on the main track of the clinic business and purposeful operations. To achieve group-level profitability, the company plans to maintain profitable business levels, improve operational efficiency in the clinic business, and scale back investment in loss-making businesses.

A：The clinic business is in a strategic GIC investment stage and contributes to profitability by maintaining a high growth rate of over 30% for the past 10 quarters, improving growth margins, and customer efficiency. The company expects substantial continued improvement in clinic growth margins in Q3 and Q4.

A：The company's approach to cost optimization involves focusing on key business and critical tasks through standardized operations, effective management, and AI enablement to improve capabilities and drive cost reduction and operational improvements.